The 1st February brought the news that Microsoft have offered to buy out Yahoo for $44.6 billion. They plan to join forces to provide a better service than Google. This is said to be the biggest Internet deal since the Time Warner-AOL merger.
This offer comes the day after the non-executive Chairman left the board. Yahoo is currently having a tough time competing with Google, and it is unlikely to see a larger bid come in than that of Microsoft, who say they can already see 4 areas of Yahoo that can generate ate least $1 billion.
this announcement is sen by some as the next major milestone in Microsoft's transformation. On the news the Yahoo shares jumped to more tan 47%.
The half-cash, half equity offer is mainly about building Microsoft's advertising business on top of last summers $6 billion investment. Microsoft will benefit from the merger in 3 ways; scale, technology and infastructure.
The announcement appears to be the formal acknowledgment of what has been unsaid for a long time. The fact that no single company will be able to seriously be in competition with Google at this moment.
the announcement had already caused protests, one of which is from Google's own, some of which are under review by the European Commission.
www.internetnews.com have a feautre running on this story with all updates as they occur. I found this very useful and interesting.
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